Editorial: Give students a break to help pay for college

While new grads catch up on their sleep following ceremonies and parties over the weekend, New York's U.S. senators are working on two fronts to help make college more affordable.

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Posted May. 21, 2013 at 2:00 AM

Posted May. 21, 2013 at 2:00 AM

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While new grads catch up on their sleep following ceremonies and parties over the weekend, New York's U.S. senators are working on two fronts to help make college more affordable.

Sen. Chuck Schumer wants to prevent the rates on subsidized students loans from doubling on July 1, from the present rate of 3.4 percent to 6.8 percent. He estimated that the increase would cost the average student an extra $3,798. In the Hudson Valley, more than 48,000 students depend on these loans, including 3,215 at SUNY New Paltz and 1,570 at Mount Saint Mary College.

Sen. Kirsten Gillibrand agrees and has proposed an additional step to help keep college from becoming more of a burden. Because New Yorkers carry an average of $30,000 in student loan debt, she wants to lower the interest rate through the Federal Student Loan Refinancing Act.

It would enable students and graduates who have an interest rate above 4 percent to refinance their federal loans at a lower, fixed rate of 4 percent.

These are not only good ideas and good investments, it turns out that they also are something the nation can afford. The Congressional Budget office estimated earlier this year that the federal government actually makes money on these student loans, taking in 36 cents for every dollar that goes to a student. In the next year, the budget office estimated, the treasury would reap $34 billion from student loans at a time when so many who borrowed to go to college struggle to find a job, let alone start paying back any money.

It made sense when the Obama administration removed the banks from their lucrative, risk-free role as middlemen on student loans and it makes even more sense to give this break to recent grads and continuing students.